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Last year I was asked to give a presentation on the challenges facing Western policymakers. We ranged widely across a depressing set of subjects, from stagnating incomes to inequality, public sector austerity, job insecurity and the rise of populism.
Last month the governor of the Bank of England, Mark Carney, issued a stark warning about the impact of climate change: “If…companies and industries fail to adjust to this new world, they will fail to exist”. Mr Carney’s statement was co-signed by the chair of the Network for Greening the Financial System, a coalition of 36 central banks, including the People’s Bank of China. The Network helps central banks measure and mitigate the risks to the financial sector posed by climate change. Last month’s statement signals that climate change has well and truly arrived as an issue for central bankers.
Today’s Briefing looks at the state of global activity one-third the way through the year.
Economists went into 2019 expecting global growth to slow modestly and that’s just what has happened. The slowdown is being driven largely by advanced economies, especially the euro area.
Most conversations about the UK’s poor productivity record eventually turn to education and skills. Everyone agrees that education is vital but there is more debate about the relative value of different models and types of education. This week’s Briefing offers some thoughts on how the UK system compares to others and looks at some of the salient characteristics of the British model.
Today’s Briefing summarises the findings of the latest Deloitte Survey of Chief Financial Officers which was released overnight. The full report is available at: https://www2.deloitte.com/uk/en/pages/finance/articles/deloitte-cfo-survey.html
There’s no doubt that growth in the West is slowing. The question is whether the slowdown could turn into a recession. Last month the US yield curve, a key gauge of future US growth, temporarily dipped into recessionary territory for the first time in ten years.
China’s economic transformation in the last four decades is one of the great economic success stories of modern history. Through liberalisation and opening up to trade China was able to grow by 10% a year between 1980 and 2018. Its economy expanded by a factor of 30 and it easily dodged recession during the global financial crisis. There is no precedent in history for an economy of this size growing at such a rate for so long.
This morning we are launching our quarterly “Global Economy in Charts” report, a 20-page slide deck, available here. Created by my colleague Debo, the report examines the big global macro trends and challenges. Charts can be cut and pasted into your own reports. Do drop Debo a line at firstname.lastname@example.org with ideas and comments.
With Brexit uncertainty undimmed we start this week’s Briefing with a short recap on the economics of leaving the EU.
The consensus among economists is that the UK will grow by 1.3% this year and 1.5% next year. With activity slowing across the world, particularly in the euro area, and the UK scheduled to leave the EU, growth at these rates looks pretty respectable. Given the uncertainties facing the UK it’s perhaps surprising that its economy is expected to outpace Italy’s or Germany’s this year.